2018 Budget – very predictable

The budget to “help rebuild New Zealand’s reputation”

Touted as predictable, it did not disappoint – nor is the Government making any apologies for this. Most of the big ticket items were, of course, announced prior to Christmas in the 100 day Budget – including the whopping $5.5 billion families package, free tertiary study, and the $60 a week first-start payment for newborns.

Yesterday’s Budget is branded as a rebuild budget, with the Prime Minister being quite clear that it is to “help rebuild New Zealand’s reputation”. The only surprise was the size of the surplus, a $3.1 billion surplus expected to rise to $7 billion in 2022.

This surplus falls, in part, to a windfall gain from extra tax revenue since last year’s pre-election fiscal update. But despite this surplus, the Budget does fall on the conservative side of spending – in some areas looking rather miserable, with Finance Minister Grant Robertson repeatedly using the term “fiscal responsibility”.

The big winner on the day was Health.

2018 New Zealand Budget in a snapshot

Health

$4 billion going into health – $2 billion of this is going to the District Health Boards. There is a $100 million boost to midwifery services and bowel screening will be extended.

Free doctors’ visits have been extended to all under 14 year olds, and cheaper visits for Community Card holders.

Education

The education sector receives almost $2 billion – to be spent on 1500 new teachers, 200 new classrooms and a large boost to learning support.

Learning support will receive an extra $133.5 million over a period of four years. An extra $30.4 million allocated to the deaf and hearing impaired.

Primary Industries

Ministry of Primary Industries funding to increase by $9.3million over the next four years – but compare that to the cost of Mycopasma Bovis at $38 million over the next two years.

Justice

An allocation of $1.2 billion to fund 920 police officers and 240 support staff in 2018.

Housing

Provision for the building of an additional 1600 state houses per year, an increase on the government target of 1000 houses a year. This will cost $234 million over four years.

Insulation grants will be available for low income owner-occupied homes at a cost of $142.5 million over four years.

Social Services

$26.8 million over four years to increase places in a six-week programme for unemployed youth.

Refugee funding has increased by $7.7 million for capital investment over four years as well as $1.5 million each year going to the Mangere Refugee Resettlement Centre to help the Government increase the quota to 1500 per year – it has not been specified when the quota will increase.

Taxation

Nothing to see here – the tax cuts proposed to take effect May 2018, by the previous government have been scrapped.

Funding boosts provided to the IRD for initiatives to improve tax compliance – expected to raise an extra $183 million in tax over the next four years.

Funds for the IRD to develop a programme for the future R&D tax incentive.

Natural Resources

DOC has received a spend increase of $181.6 million over four years – its first boost in 16 years.

$100 million of new capital funding for the Green Investment Fund designed to encourage private sector investment in clean tech and new jobs with an additional $14 million in new funding to help the Government deliver on commitments to address climate change.